Adams Adeiza, Queen Esther Oye and Philip O. Alege
This study examined the macroeconomic effects of COVID-19-induced economic policy uncertainty (EPU) in Nigeria. The study considered the effects of three related shocks: EPU…
Abstract
Purpose
This study examined the macroeconomic effects of COVID-19-induced economic policy uncertainty (EPU) in Nigeria. The study considered the effects of three related shocks: EPU, COVID-19 and correlated economic policy uncertainty and COVID-19 shock.
Design/methodology/approach
First, the study presented VAR evidence that fiscal and monetary policy uncertainty depresses real output. Thereafter, a nonlinear DSGE model with second-moment fiscal and monetary policy shocks was solved using the third-order Taylor approximation method.
Findings
The authors found that EPU shock is negligible and expansionary. By contrast, COVID-19 shocks have strong contractionary effects on the economy. The combined shocks capturing the COVID-19-induced EPU shock were ultimately recessionary after an initial expansionary effect. The implication is that the COVID-19 pandemic-induced EPU adversely impacted macroeconomic outcomes in Nigeria in a non-trivial manner.
Practical implications
The result shows the importance of policies to cushion the effect of uncertain fiscal and monetary policy path in the aftermath of COVID-19.
Originality/value
The originality of the paper lies in examining the impact of COVID-19 induced EPU in the context of a developing economy using the DSGE methodology.
Details
Keywords
Abiola John Asaleye, Philip O. Alege, Adedoyin Isola Lawal, Olabisi Popoola and Adeyemi A. Ogundipe
One of the challenging factors in achieving sustainable growth is the inability of the Nigerian government to diversify the country's revenue base. This study aims to investigate…
Abstract
Purpose
One of the challenging factors in achieving sustainable growth is the inability of the Nigerian government to diversify the country's revenue base. This study aims to investigate the relationship between cash crop financing and agricultural performance in Nigeria.
Design/methodology
Four crops were considered, namely, cotton, cocoa, groundnut and palm oil. The impact of cash crop finance shock on agricultural performance was investigated using the vector error correction model (VECM), while the long-run relationship was examined through the identification of long-run restrictions on the VECM.
Findings
The variance decomposition showed that financing shock is more sensitive to cause variation in aggregate employment than aggregate agricultural output in palm oil, while for cocoa, cotton and groundnut showed otherwise. The long-run structural equations exert a positive relationship between cash crop financing and agricultural performance, except for oil palm and cocoa financing that has a negative connection with agrarian employment.
Research limitations/implications
The study is limited to the unavailability of data for agriculture sector capital utilisation, which was not used.
Practical implications
These results show that long-run benefit can be maximised by appropriate funding in cotton and groundnut production to promote sustainable growth.
Originality/value
The study examines the impact of cash crop financing on agricultural performance with the aim to promote sustainable growth in Nigeria using identified VECM.
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Samuel Egbetokun, Evans Osabuohien, Temidayo Akinbobola, Olaronke Toyin Onanuga, Obindah Gershon and Victoria Okafor
Interaction between environmental pollution and economic growth determines the achievement of the green growth objective of developing economies. An economy turns around the…
Abstract
Purpose
Interaction between environmental pollution and economic growth determines the achievement of the green growth objective of developing economies. An economy turns around the inverted U-shaped environmental Kuznets curve (EKC) when pollution is effectively dampened by social, political and economic factors as such economy grows. Thus, the purpose of this paper is to examine the EKC considering the impact of institutional quality on six variables of environmental pollution (carbon dioxide (CO2), nitrous oxide (N2O), suspended particulate matters (SPM), rainfall, temperature and total greenhouse emission (TGH)) using the case of Nigeria.
Design/methodology/approach
The EKC model includes population density, education expenditure, foreign direct investment and gross domestic investment as control variables, and it was analysed using the autoregressive distribution lag (ARDL) econometric technique, which has not been applied in the literature on Nigeria.
Findings
The results, inter alia, indicate that there is EKC for CO2 and SPM. This implies that the green growth objective can be pursued in Nigeria with concerted efforts. Other environmental pollution indicators did not exert significant influence on economic growth.
Practical implications
Therefore, it is recommended that Nigeria’s institutional quality be strengthened to limit environmental pollution in light of economic growth.
Originality/value
Previous studies are yet to apply a more developed econometric method, like the ARDL, to estimate the EKC model for Nigeria. This study fills this observed knowledge gap.
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Udemezue Ndubuisi Nnakee, Chi Aloysius Ngong, Chinyere C. Onyejiaku, Shadrack Moguluwa and Josaphat Uchechukwu Joe Onwumere
This paper aims to examine the long-run relationship between stock market development and Nigerian economic growth from 1980 to 2020.
Abstract
Purpose
This paper aims to examine the long-run relationship between stock market development and Nigerian economic growth from 1980 to 2020.
Design/methodology/approach
Market capitalization, number of listed companies, total value traded ratio and turnover ratio are used. An autoregressive distributed lag model is used for the analysis.
Findings
The market capitalization ratio and turnover ratio have positively significant links with economic growth. The number of listed companies has a negative and non-significant impact on economic growth. Total value traded ratio has a negatively significant link with economic growth in the short run. The positive but insignificant relationship between traded value ratio and turnover ratio in the long run growth means that the Nigerian stock market is growth inducing and on the right track as stock market liquidity drives growth.
Research limitations/implications
The government and Security Exchange Commission should increase the market liquidity level by improving the trading infrastructure. The government and regulatory authorities should improve and effectively implement the existing policies that would ensure stock market growth. This facilitates the investors’ speed to purchase and sell shares. The Securities and Exchange Commission should reduce transaction costs to encourage active trading activities. The market should be diversified with investment instruments such as derivatives, futures and swap options which would limit the adverse effect of listed companies in the market. To increase the stock market liquidity, the Security and Exchange Commission should apply moral suasion to bring private companies that have met certain financial thresholds to convert to public companies. Government should improve on the legislation to encourage more private companies to list on the stock exchange.
Originality/value
The study findings add value in that stock market development has a positive impact on economic growth in Nigeria.